Customs Policies Update - for the Period of February 2017

Customs Policies Update - for the Period of February...

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Customs Policy Update – February 2017

The WTO Trade Facilitation Agreement Enters Into Effect

On 22 February 2017, the Agreement on Trade Facilitation entered into effect after the number of member states that ratified the Agreement on Trade Facilitation exceeded the statutory threshold of two-thirds of WTO member states. The Agreement will be implemented in member states that have ratified it. As China ratified the Agreement on September 2015, it will immediately put into practice measures that aim to, for instance, simplify certification processes and standardise export expenses, with the exception of only a few measures relating to single windows, determination and release of average Customs clearance time, duty-free import of goods placed under outbound processing and Customs cooperation for which transitional periods have been set. The Agreement will enhance the competitiveness of China’s products, improve the foreign investment environment, elevate the trade facilitation levels of trading partners of China and create a convenient Customs clearance environment for exports. Globally, the Agreement will reduce the average cost of global trade and speed up Customs clearance processes.

After the Ministry of Finance, the General Administration of Customs and State Administration of Taxation jointly issued the Notice on the Import Tax Policies that Support Sci-Tech Innovation during the 13th Five-Year Planning Period (Cai Guan Shui [2016] No.70), on 14 January 2017, the Ministry of Finance, the Ministry of Education, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Civil Affairs, the Ministry of Commerce, the General Administration of Customs, the State Administration of Taxation and the State Administration of Press, Publication, Radio, Film and Television jointly issued the Notice on the Administrative Measures for Import Duty Policies to Support Scientific and Technological Innovation (Cai Guan Shui [2016] No.71), specifying measures of various authorities to support the import tax policy that will benefit technological innovation. The Notice took effect on 1 January 2016.

China Customs Expanded the Coverage of Paperless Customs Clearance

By issuing the Announcement on Expanding the Coverage of Paperless Customs Clearance (GAC Announcement [2017] No.8) on 3 February 2017, the General Administration of Customs decided to expand the coverage of paperless Customs clearance to businesses of all credit grades, with the purpose of further deepening the paperless Customs clearance reform and strengthening trade facilitation. After enterprises enter into the Electronic Data Application Protocol with a regional Customs office and a third-party certification agency (the China E-port Information Data Centre), they can benefit from paperless Customs clearance at any Customs office across the country without the need to enter into the protocol separately.

The Provisional Measures on Administration of Filing for Establishment and Change of Foreign Investment Enterprises (Announcement of the Ministry of Commerce [2016] No.3) issued by the Ministry of Commerce on 8 October 2016 supersedes examination and approval administration with filing administration for the establishment and changes of foreign-invested enterprises that are not involved in the special administrative measures on foreign investment access as stipulated by the State. In order to facilitate this new practice, the General Administration of Customs issued the Announcement on Matters Concerning the Registration of Foreign-funded Enterprises (GAC Announcement [2017] No.9) on 3 February 2017, prescribing that foreign-funded enterprises (including enterprises with investments from Taiwan, Hong Kong, Macau and overseas Chinese investors) that have obtained the Filing Acknowledgement for Establishment of a Foreign Investment Enterprise or the Filing Acknowledgement for Change Matters of a Foreign Investment Enterprise issued by the Ministry of Commerce will no longer be asked by Customs to provide the Approval Certificate for Foreign Investment Enterprises when applying for consigner and consignee registration for import and export purposes.

The Announcement on Matters Concerning the Launch of the China-South Korea Country-of-Origin Electronic Information Exchange System under the Asia-Pacific Trade Agreement

In order to further facilitate import and export Customs clearance under the Asia-Pacific Trade Agreement, the General Administration of Customs issued the Announcement on Matters Concerning the Launch of the China-South Korea Country-of-Origin Electronic Information Exchange System under the Asia-Pacific Trade Agreement (GAC Announcement [2017] No.10) on 4 February 2017. Starting from 8 February, an importer is required to fill out an import declaration form under the “No-Country-of-Origin Declaration Mode” in accordance with relevant rules when making import declarations in respect of goods with South Korea as the country of origin under the Asia-Pacific Trade Agreement. If the electronic information of the Certificate of Origin received by Customs is consistent with that declared by an importer, Customs generally will not require the importer to provide the original copy of the Certificate of Origin, while in the event of inconsistency of such information, Customs will reject its declarations. If Customs has not received the electronic information of the Certificate of Origin by 10 May, an importer can still provide the original copy of the Certificate of Origin to be considered for the applicable tax rate under the Agreement. If Customs has not received the electronic information of the Certificate of Origin on or after 11 May, an importer should make supplementary country-of-origin declarations and propose its applicable tax rate under the Agreement, and can apply for pass-under-guarantee proceedings for its goods. With regard to container-transported goods with South Korea as the country of origin, if Customs has received the electronic information of the Certificate of Origin, and an importer can provide a certificate of shipment for the whole journey to prove that the container number and seal number in relation to the goods have not changed in the course of shipment, Customs will consider the goods eligible for direct shipment.

The State Administration of Taxation Enhanced the Management of Import VAT Deductions

In order to suppress the criminal acts of using Customs clearance certificates to fraudulently claim tax deductions, the State Administration of Taxation issued and implemented the Announcement on Enhancing the Customs Management of Import VAT Deductions (Announcement of the State Administration of Taxation [2017] No.3) on 13 February 2017, initiating wide and stringent inspections on Customs clearance certificates and strengthening the efforts of Customs to manage import VAT deductions. The Announcement expressly requires a VAT general taxpayer to provide the accurate name of the enterprise when importing goods, and ensure consistency of the name of the enterprise between the Customs clearance certificate and the tax registration certificate. Tax authorities will check the information on Customs clearance certificates obtained in respect of import goods that are subject to VAT deductions against payment information collected by Customs. Deductions on tax amounts will be temporarily disallowed if any discrepancies are identified as a result of such inspections, but will be reinstated if further reviews prove otherwise.

Import of North Korean Coal Suspended for the Year

In executing UN Security Council Resolution 2321, the Ministry of Commerce and the General Administration of Customs jointly issued Announcement of the Ministry of Commerce and the General Administration of Customs [2017] No.12 on 18 February 2017 to suspend the import of North Korean coal (including the coal for which declarations have been accepted by Customs, but with Customs clearance pending) for the year. The Announcement will be implemented on and after 19 February 2017, and remain effective until 31 December 2017.

The Announcement of the General Administration of Quality Supervision, Inspection and Quarantine on Further Standardising and Promoting the Practice of Agribusinesses to Produce Exported Food on the Same Production Line and Under the Same Standards for the Same Quality for Domestic and Overseas Sales

The General Administration of Quality Supervision, Inspection and Quarantine issued and implemented the Announcement on Further Standardising and Promoting the Practice of Agribusinesses to Produce Exported Food on the Same Production Line and under the Same Standards for the Same Quality for Domestic and Overseas Sales (Announcement of the General Administration of Quality Supervision, Inspection and Quarantine [2017] No.15) on 22 February 2017, aiming to improve supply quality and efficiency, help export enterprises leverage both the domestic and overseas markets, and further standardise and promote the practice of producing exported food on the same production line and under the same standards for the same quality for domestic and overseas sales. The Announcement specifies the requirements that food agribusinesses need to meet in order to be in line with the practice, introduces an information public service platform that facilitates agribusinesses to produce exported food under the practice for domestic and overseas sales, as well as a logo for this purpose, and encourages the development of business service platforms to support agribusinesses producing exported food under the practice.

Updates on Local Customs Regulations

Urumqi Customs issued an announcement (Announcement of Urumqi Customs and the Food and Drug Administration of Xinjiang Uygur Autonomous Region [2017] No.1) on 8 February 2017 to provide for the Customs proceedings and necessary materials in relation to pharmaceuticals that enter Customs special supervision areas and bonded logistics centres (Type B) from outside China or enter China from special supervision areas and bonded logistics centres (Type B), as well as narcotic drugs and psychotropic substances that enter Customs special supervision areas and bonded logistics centres (Type B) from outside China.